I’ve listened to preachers
I’ve listened to fools
I’ve watched all the dropouts
Who make their own rules
One person conditioned to rule and control
The media sells it and you live the roleMental wounds not healing
Driving me insane
I’m going off the rails on a crazy trainHeirs of a cold war
That’s what we’ve become
Inheriting troubles – I’m mentally numb
Crazy, I just cannot bear
I’m living with something’ that just isn’t fair
That pretty much sums it up for the markets in September – especially for the silly old bears, who were as sure that we were going down in flames at the beginning of September as the bulls are sure that we are going to the moon at the beginning of October. As one of the few people left in America who has the ability to step back and look at the bigger picture (the one where “history” goes back further than last weekend), it’s kind of funny when we pull out the old 1-year chart (I know – “what’s that?“) to see what all the fuss is about.
Last Tuesday we looked at the International markets and set targets. Japan was a worry then and continues to be a worry with the Nikkei now LOWER than it was last week, much more so as they fell another 2% in this morning’s trading as the Yen made new highs and Industrial Output dropped 0.3% in August, missing forecasts of 1.1% by 400%. This is Japan’s 3rd straight drop, after tumbling 1.1% in June and 0.2% in July and seems worse as the government already tried to intervene, but to no avail. In fact, now that auto incentives are ending, auto makers predict a 10.5% drop in October! “We have not seen such a negative surprise for some time,” said HSBC Securities chief economist Seiji Shiraishi. The result underscores the risk that Japan’s economic growth may stumble further, Mr. Shiraishi said.
The Shanghai Composite and the Baltic Dry Index continue to flash warning signs and the CAC (3,750) and the DAX (6,300) were both rejected from their 5% lines while the FTSE is struggling to hold theirs at 5,500. We’ll be very interested in seeing how well Europe holds up into the close today. Our concern is that today will be the final prop job and the sell-off could begin as early as 1pm but, then again, we may be able to hold up until almost the 15th…
